Consumer Reports Researchers Uncover Questionable Sales Practices at Top Brokerages

by Wall Street Fraud on January 26, 2012

Stock broker fraud attorneyWhile Consumer Reports' online readers report that they are “very satisfied” with nearly all of the nation's 13 major brokerages, that might not mean they are actually doing a good job. In fact, undercover researchers found at several leading firms.

As part of its investigation of financial-services companies, Consumer Reports sent staff members into brokerage offices in New York and Washington state to see how clients seeking advice were served.

Below are a few concerning practices the investigation revealed:

  • One “empty nester” was recommended a balanced, managed set of funds after his first visit to a JP Morgan Chase office. No other investment options were reviewed or compared.
  • Another staff member, a woman in her mid-50s, was directed towards an annuity product even though the Citibank adviser knew little about her.
  • One staff member was shown a chart on a portfolio's performance that omitted the significant impact of fees.

Consumer Reports also asked major financial-services companies to prepare investment plans based on the profiles of five of those staff members. Two independent financial planners and their teams evaluated the appropriateness of the advice in the companies' plans.

According to the organization, the financial advice judges found inappropriate advice in several plans. They also found most of the documents to be filled with boilerplate language and lacking real, actionable advice.

The complete investigative report, and the full broker satisfaction ratings chart are available at www.ConsumerReports.org.

If your broker or adviser has misrepresented the risks associated with an investment product or recommended an unsuitable security, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.

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